Pre-Litigation Mediation

Author: - Shawaiz Nisar

3rd Year B.A. LL.B (Hons.)
Rajiv Gandhi National Law University, Punjab

1. INTRODUCTION

Mediation is an alternative method for dispute resolution. Keeping in view the tedious process of courts, people more often opt mediation as the dispute solving mechanism, since the courts are already burdened with cases and also take a long time for giving the final verdict. However, mediation can only be done on civil disputes rather on criminal ones. Parties can opt for mediation at any stage—before litigation, during litigation or after litigation. Pre-litigation mediation is simply a process preferred by the parties to settle the issue speedily by an unbiased usually recognised third party. This is comfortable because parties have the freedom to choose their mediators, who have any authority over the subject matter of the topics. And the final agreement of this settlement is legally binding. The issues can be solved quickly and this process is somewhat inexpensive compared to the expenditure incurred at every stage of the case in litigation.

Seeking to reduce the number of pending cases, the Government is working on a mechanism to introduce a pre-litigation mediation process, so that avoidable cases can be prevented from reaching the courts and settle the issues effectively. It’s a step taken to improve the judiciary system in India as it is already with a backlog of crores of cases. 

Mediation is people-friendly where there is scope for all parties to win. However, the acceptability levels are low. If the parties agree on a mediator in which they have confidence, this is a rewarding dispute settlement mechanism.

The pre-litigation mediation occurs before a suit is filed before any court or even before a notice is sent to the court. The mediation is based on negotiation and understanding between the parties, where the mediator tries to make parties come to a settlement in which both parties are content. Pre-litigation mediation covers a wide range of areas such as domestic, consumer, property, commercial, and others. Even Family courts suggest family disputes be sent to mediation centres to make way for reconciliation. However, parties have their own choice to either opt for mediation or litigation. The mechanism has even been recognised by the Apex Court in its judgment in K. Srinivas Rao vs. D.A Deepa[1].

In case of commercial disputes, a proper codification recognising the mediation process has been given under the Commercial Courts Act, 2015[2]. An amendment to the Act in 2018[3], resulted in the insertion of Section 12A[4] which provides for pre-litigation mediation. The provision says that in cases where an interim relief by the court is not urgent can go for settlement in pre-institution mediation. There are proper rules called Commercial Courts ( pre-institution mediation and settlement ) Rules, 2018[5], defining the procedure for the pre-litigation mediation process. These rules state that to initiate a mediation, the plaintiff is required to apply to the State or District Legal Services Authority. The concerned authority has to inform the other party of the same and appear before it within ten days period and attend the mediation proceedings. In case, the other party does not turn up for the proceedings which are considered as non-starter of mediation. On the other hand, if it turns up then it will be considered as the starting of the process. Subsequently, if the mediation process concluded/final award, the same shall be recorded and shall be deemed to have the same authority/status as of the arbitral award under section 30 of the Arbitration and Conciliation Act, 1996[6]. The concerned authority must complete the process within 3 months period, with a maximum extension of 2 months from the date of the application filed for mediation. 

The method of pre-litigation mediation has been adopted by various high courts in the country such as Delhi High Court[7], Punjab & Haryana High Court[8] and few others. The current Chief Justice of India while giving a speech in a recent conference went on to say that pre-litigation mediation in the country is must[9] and it has several benefits to reduce the burden on courts and also ensure a quick solution to parties.

2. BENEFITS OF PRE-LITIGATION MEDIATION

Most of the times the relationship between the parties to litigation aggravates further as the case goes on. One of the benefits of pre-litigation mediation is that the tensions between the parties are dumped at the beginning itself. The parties, in the end, turn out to be friends as both are content with the final order. In litigation, the tensions between the parties aggravate as the case goes on and in the end, the parties turn out to be enemies of each other, since either party wins and the other losses.

The mediation keeps the conflict/dispute confidential as the proceedings are done in a closed hall. There is no damage to the reputation of either party. However, in case of litigation, the proceedings are open and the parties often suffer damage to their reputation.

Thirdly, the mediation can prove cost-effective since the period for solving the dispute is relatively short. In litigation, the time taken by a dispute to get solved is usually in years and some even take decades. More time means more hearings ultimately costing the client.

The pre-litigation mediation is also time effective as the dispute is usually solved in months rather than years and decades in litigation. The time is very important to both parties and, in the meanwhile, both the parties get emotionally, physically, financially and mentally tortured by the litigation. On the other hand, mediation protects the parties from such torture.In litigation, either party wins and the other losses, however in mediation both the parties win by negotiating for each other’s benefit. 

There is a certainty of the final settlement in case of mediation, the same is sometimes a remote possibility in case of litigation.

3. CONCLUSION

Pre-litigation mediation is an effective way by which the burden of courts can be relieved. Many people do not know about the alternatives to litigation. They often find it easy to go to courts because they are not aware of any alternatives. There are a lot of cases pending before Indian courts and the situation is such that they are not even able to solve the number of cases that are filed per day. Currently, about 33 million cases are pending before the Indian courts[10]. Estimates say that if no fresh case is filed, it will take around 360 years to just clear the backlog. In the United States Supreme Court around 5000-6000 petitions are filed every year, out of those only 100-200 are admitted for hearing, the rest are disposed of without any hearing[11]. In India, an appeal to the Apex Court has become the easiest task to do. Parties first file the case before the lower court, they subsequently move to higher jurisdictions with ease even before the trial is complete in the lower court. There is no strict rule for appeals to get admitted before the Supreme Court, hence increasing the burden on the court. People will continue to file cases but there is a need to give them away by which their issues are solved easily and quickly and at the same time reducing the burden on courts. Pre-litigation mediation can surely be one such alternative.

 

References:

[1] K. Srinivas Rao v. D.A Deepa (2013) 5 SCC 226.

[2] Commercial Courts Act, 2015 (Act No. 4/2016)

[3] THE COMMERCIAL COURTS, COMMERCIAL DIVISION AND COMMERCIAL APPELLATE DIVISION OF HIGH COURTS (AMENDMENT) ACT, 2018 (Act No. 28/2018) (Hereinafter, 2018 Amendment Act)

[4] 2018 Amendment Act § 12A.

[5] The Commercial Courts (Pre-Institution Mediation And Settlement) Rules, 2018 3760 GI/2018 (India).

[6] Arbitration and Conciliation Act 1996, § 30 (Act No. 26/1996) (India)

[7] MANDATORY PRE-INSTITUTION MEDIATION IN CASE OF COMMERCIAL MATTERS, Delhi State Legal Services Authority,

 https://dslsa.org/mandatory-pre-institution-mediation-case-commercial-matters/.

[8] Pre-Litigation Mediation, High Court of Punjab & Haryana ,

Pre-Litigation Mediation

[9] Make pre-litigation mediation must: CJI, The Tribune (Feb 08, 2020),

https://www.tribuneindia.com/news/nation/make-pre-litigation-mediation-must-cji-38054.

[10] Pendency of cases in the Judiciary, PRS Legislative Research ,

Pendency of cases in the Judiciary | PRSIndia

[11] Markandey Katju, Backlog of cases crippling judiciary, The Tribune  (May 22, 2019) ,

Backlog of cases crippling judiciary.

Leave a Reply

Your email address will not be published. Required fields are marked *